tv Your Money CNN February 22, 2014 11:00am-11:31am PST
can you survive on $7.25? good afternoon, i'm christine romans. this is "your money." that swach a reality for 1.6 million americans, another 17 million earn only slightly more. these are the people who prepare your food, clean your offices and stock the shelves at your local supermarket. if president obama gets his way, those workers will get a raise. now, the minimum wage today buys 20% less than 50 years ago. the white house wants to trays from $7.25 to $10.10 an hour. some republicans and business
leaders say raising the minimum wage will hurt the very people it's supposed to help. liberals stay will lift nearly 1 million people out of poverty. both sides this week seized on a new report from the congressional budget office. here's what republicans see. they say employers will be forced to raise prices at the checkout. that would hurt consumers. or they do cut hours. that could hurt their employees. and in some cases they could be forced to cut jobs. just how many? around 500,000 jobs, at a time when the labor stock market still struggling to grow. but liberals dispute the number arguing this is about social justice and they say even if raising the wage does cost half a million jobs, that's only 0.3% of the workforce. compare that to the 16.5 million american whose would see fatter paychecks each week. now, raising the minimum wage is popular with voters and this is an election year. even a slim majority of republicans support raising it, but some states and companies aren't waiting for washington.
just this week gap stead would raise wages for 65,000 workers. i sat down with treasury secretary jack lew for an exclusive interview saying the president is doing what he can but it's up to congress to raise the pay for low-wage workers. >> i don't believe it's right for people to work for 40 hours and take-home pay below the poverty line. the president made it clear as a country we have to make sure if you work full-time you're at least at the poverty line. >> you think can you get that done this year? i know the president has done an executive order on a small sliver of the federal workers? >> we'll keep pushing at it. it's obviously not in our power to force congress act but question make the case for it and the american people and continue pressing because it's the right thing to do. states are taking action on their own and in many states doing it, their economies are doing well, and i think that it's just snag we need to do.
>> cbo gave the people that were against it a job loss, it would be a poverty alleviation program on the backs of small businesses who'd have to pay for it. >> if you look at that cbo report it showed it would take almost 1 million people out of poverty. if you're working full-time getting out of poverty and working your way out of poverty is an important thing for our economy and for our country. there are a lot of different views on the economics of the minimum wage. i know that the studies done by a number of people including nobel laureates show an opposite effect. we have time noor debate. >> the people making $7 an hour say there's no time for debate. they're really mad, but they aren't the only ones. the 1%, the other end of the spectrum. the 1% of the 1% some of them are mad, too. we asked our own billionaire, the extremely successful chairman and ceo of w.l. ross and company, one of the largest
corporate orpganization in the world. forbes puts it at $2.6 billion. we think you are qualified to talk about what the 1% think answer that, the this top of the income spectrum. start with income and equality. two-thirds say the government should have a role in reducing inequality. raising the minimum wage will lift people out of poverty. do you believe it's the government role to narp oh that income inequality gap? >> the real issue is upward mobility. when i first went to work, i was working summers and getting paid minimum wage and it wasn't very lucrative even then, but it was the way things were, and a lot of college kids in those days worked at mun mum wage, saved a little tiny bit towards their skiing or their books or something while they're at school, but i think upward mobility is the real issue, and
i don't think the minimum wage is what solves that. it may solve a different problem. the way to solve the upward mobility problem is education. and i'm extremely disappointed that government, with all the rhetoric about the new jobs being created in a technological society is permitting high schools to stop teaching high school math and high school science. if you don't have kids who are properly equipped for the jobs of future, you're going have a continuing problem of lack of upward mobility. >> let me ask you quickly about this. why do you think people -- you've had a minimum wage job, i've had a minimum wage job. i'm looking around me, everyone here has had a min much wage job in the past. why are people so mad? because there aren't the jobs in the middle, wilbur? another reason many say they're mad because they see 95% of the income gains of the recovery have gone to the top 1%, they
haven't been shared and they're very concerned about that the reason they haven't been shared is the lack of upward mobility [ bleep ] i got out of school, out of harvard business school, i had what in those days was quite a lot of student debt. so what did i do? shared an apartment with some other guys in new york. saved up. each month gradually paid down the debt and eventually worked my way out of it. people nowadays seem to feel that they can borrow the money, and as i understand it, some of these student loan programs not only lend them the tuition but lend them entertainment money. when i was at school, in addition to having student aid, i had to work. >> so do you think that -- >> i had little jobs. >> do you think that -- people think they're more entitled now? they think they're entitled to a middle class way of life and don't work as hard? >> well, i think there's getting to be a feeling, and i was alarmed at the remarks
attributable to nancy pelosi, where she said the best thing about obamacare is that know people don't have to have jobs. i don't think it's a legitimate choice for an able-bodied adult to say, i don't feel like working. i feel just like being subsidized by the government, and that's a legitimate choice. i don't think it is a legitimate choice. >> do you think -- is it a choice you think that more people are taking? i mean, do you think that's the difference between now and when you were working a middle class -- a minimum wage job -- sorry. >> yeah, i do, because if you look at labor force participation, it's been going steadily downhill. 37% of the working age population, according to the government statistics, neither has a job nor is seeking one. that's a record high. it may even be over 37% by now. >> a lot of people think there's not something out there. not because suddenly a third of
the population this i want to live on the government dime and not have a job. there's not the opportunity there used to be, wilbur, when you were coming up. >> i don't agree with that. i've, in fact -- i believe, as weird as it may sound, that expiration of long-term unemployment is actually going to ben -- benefits is actually going to result in lower unemployment, and the reason i believe that, i have some friends who are in rapidly glowing businesses entry level jobs. warehousing, plant guards, things like that. they tell me the applications they get from the unemployed folks only come in as the unemployment benefit is about to run out, and i think that's a very, very significant thing. now that it has run out for people, i'll bet you a lot of those will find a way to get a job. >> all right. we'll have you come back and talk more about education and how we can nation part of the
equation. definitely we need to have more technical skills and do a better job of matching people and skills and the jobs that are available. always nice to talk to you. thank you, wilbur ross. >> thank you. coming up, the rest of the nation is watching colorado's experiment in leaguized marijuana. is it paying off? >> we paid about $190,000 in sales tax that we collected during the month of january. >> and where is that tax money going? it's going to teach kids to stay away from -- smoking legal marijuana. we head to colorado, next. ♪ [ female announcer ] most of the time it's easy to know which option is better. other times, not so much. so it's good to know that mazola corn oil has 4 times more cholesterol blocking plant sterols than olive oil. and a recent study found that it can help lower cholesterol 2 times more. take care of those you love and cook deliciously. mazola makes it better.
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anna, just learning how much money colorado expects to bring in from the legal recreational sale of marijuana. >> we're talking lots of money, christine. about six weeks since it became legal to sell it for recreational use here in colorado. to say business is going strong is and understatement. the state released new tax revenue projections for selling marijuana and it beat expectations by tens of millions of dollars. now leaders here at the state capitol get to decide how to spend it. >> reporter: high hopes for a colorado green rusher being realize. >> exceeded all my expectations. >> reporter: business here previously just a medical marijuana dispensary more than quad quadrupled. people are lining up at the door get their hands on this stuff. packed at 10:00 when doors opened pd in fact, this pot shop
averages about 500 customers a day, and the state of colorado is reaping the benefits as well. sales and excise taxes, over 25%. >> total, $147.77. >> reporter: marijuana dispensaries were required to turn in january tax reports on thursday. >> we paid about $190,000 in sales tax that we collected during the month of january. >> reporter: while official numbers won't be made public until march, the governor's budget office just released its own tax projections. it estimates the state will collect about $184 million in tax revenues in the first 18 months of recreational pot sales. here's colorado's plan for spending that money. $40 million automatically goes to public school construction. that was mandated by voters. then the governor wants to spend about $85 million on youth prevention and substance abuse treatment. $12.4 million on public health. about $3 million on law enforcement and public safety and nearly $2 million on
industry oversight. >> i don't think the people who are buying marijuana want the tax money to be used to discourage adults from buying marijuana. >> reporter: while not everyone agrees how that money should be spent, and although still early, there's no denying the apparent economic boost. that's come from recreational pot sales. of course, right now, washington and colorado are the only two states where recreational pot is legal, and washington is still working through its regulations for sellin pot, but we know at least eight other states that are considering this from california to maine, and you have to think when they look at the kind of money colorado is projecting to make from taxing marijuana, that could have some influence, christine? >> thank you. facing the legal pot industry, the challenge, banking. the obama administration says it's okay for banks to offer services like checking and savings and loans for the legal
distributors of marijuana. until now, the estimated $2.5 billion all in cash, and the administration is worried that's a public safety program. all that cash. the big national banks are saying, no thanks. the concern there is the difference between state and federal law. the federal government regulates banking transactions, big banks don't want caught in the middle. analysts tell us small and midsized banks. 's community banks are most likely to fill the gap. finally okay from washington to do business with legal pot companies and the banks say, not quite yet. is your netflix streaming a little slow? you're not imagining it. the bandwidth battle ta could come between you and the "house of cards" next. [ female announcer ] most of the time it's easy to know which option is better. other times, not so much. so it's good to know that mazola corn oil has 4 times more cholesterol blocking plant sterols
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far this year. subscriber growth a three-year high and so is customer satisfaction. behind the streaming service, founder add ceo reed hastings a man who changed the way we watch television. ♪ >> reporter: maybe you know frank underwood? >> democracy is so overrated. >> reporter: piper chapman and michael bluth. >> not a great sign. >> reporter: what about the man who started it all. netflix ceo and co-founder reed hastings. he did a stint in the peace corps. >> teaching high school math and i loved it. >> reporter: at age 30 started his first company. pure software and made a debugging tool. he sold that fors 750 million and hastings left a rich man. then, an overdue movie from blockbuster gave him a brilliant idea. >> it was a $40 late fee. clearly there's got to be a
better way. >> reporter: in 1997 he founded netflix, a dvd by mail company. the little red envelopes would eventually contribute to blockbuster's downfall, and in a move that changed how we watch television, netflix began offering on-demand streaming. >> can watch more, watch on your schedule. >> reporter: hastings's journey isn't without missteps. in 2011, price hikes and plans to spin off its dvd business. >> named our dvd service quickster. >> causing a flood of cancellations and sent the stock price tumbling, but hastings back tracked and apologized to ku69 mer and now their stock is at an all-time high. 44 million subscribers and counting. a lot of that growth is thanks to the popularity of its original series. >> welcome back. >> reporter: with a huge chunk of subscribers watching "house of cards" season two. >> so help me god. >> reporter: and the company's fearless leader, rewarded with a 50% pay bump this year. a $3 million salary plus $3
million in stock. >> push something, something people are proud of and enjoy. >> reporter: a board neb of facebook and a huge education advocate serving for a time as president of the california state board of education. he's donated millions to help charter schools and push education technology. he's heavily involved with organizations trying to reform schools. with netflix changing tv as we know it, the business of being reed hastings is on everyone's watch list. coming up, winning an oscar can change an actor's life, but even the losers are winners this year. the value of oscar gift bags is at an all-time high, and you will not believe what's in them. next. honestly? i wanted a smartphone that shoots great video. so i got the new nokia lumia icon. it's got 1080p video, three times zoom, and a twenty-megapixel sensor. it's got the brightest display, so i can see what i'm shooting -- even outdoors, and 4 mics that capture incredible sound. plus, it has apps like vine -- and free cloud storage.
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away...is a place that's closer than you think. find your away. for a dealer and the rv that's right for you, visit gorving.com. the polar vor stex cooling the red hoss housing market. home sells te s fell 5% in janu. construction of new homes fell 16% last month. no surprise, right? hard to build a house when it's so cold out. of course, all real estate is local. how much salary do you need to buy a median priced home? a new study finds just $19,000 a year is what you need to make to afford a home in cleveland. st. louis and atlanta, pretty affordable. but in san francisco, los angeles and new york, you've got to make a lot more to buy a place. probably guess one of those cities already has the highest rent in the country, but you'd be wrong. the highest rent in the country, welcome to williston, north
dakota. 700 square foot one bedroom apartment in williston costs $2,400 a month. the most expensive in the country according to an apartment guide study. a similar pad goes for $1,500 in new york. williston's population nearly doubled since the 2010 oil boom rents have exploded. it was one of the most expensive bailouts of the financial crisis. taxpayers shelled out $187 billion to rescue mortgage giants famie mae and freddie mac, an ugly and painful time for taxpayers shouldering the costs for horrible decisions in the market. now they've recouped all of the billions they gave and even turned a profit. fannie says it will pay treasury an additional $7 billion in profit from the end of last year. give me 60 seconds on the clock. it's "money time." bad habits are back. household debt jumped last quarter for the first time since
2008. mostly because of new mortgage, but also it includes credit cards, auto and student loans. check your freezer. nestle recalling hot pockets. they may contain bad meat already recalled by the u.s. agriculture department. don't feel bad for oscar's losers. they head home with plenty of swag. this year's gift bag for nominees is worth more than $80,000. loaded with luxury items including a $16,000 hair transplant system, plus trips to japan, the rocky mountains and mexico. forget the swimsuit. barbie got new gig. entrepreneur. mattel unveiled the doll at this week's international toy fair in new york. wearing a pink dress, carrying essential cool tools of start-up life. those gadgets perform a lot fastener a handful of u.s. cities. google, bringing what it calls fiber internet to nine new metro
areas. google says it's 100 times faster than broadband. speaking of speed, the olympics are coming to a close, but the endorsement event is just getting started. winter olympians typically don't score the big deals summer olympics do. many athletes wear helmets making them less recognizable. turning medals into money, figure skater gracie gold, and sage cokotsenburger, top on the list. and the celebrity all-star game, named mvp. look at this. 20 points, 11 rebunds 6 assists. dunking, 6'5", was the co-captain of harvard's basketball team back in college. he played professionally in australia four years and wears number 80 because the u.s. is boasting in 80% high school graduation rate. the highest rate in american
history. that's it for "your money." for more of my interview with the treasury secretary, check out cnnmoney.com. have a great weekend. hello, welcome to the "cnn newsroom." i'm fredricka whitfield. what's happening this hour. straight to it. one of mexico's most know forrous drug lords is under arrest right now joaquin guzman bet noern at el chappo, aled head of a cartel captured in a joint operation between mexican and american forces at a resort in mexico. guzman has been wanted on federal drug trafficking charges and alluded authorities for years after he broke out of a mexican prison. since 2009, guzman has been